NEWS

Parsippany company to pay $37M settlement

Staff report

PARSIPPANY – Daiichi Sankyo will pay $39 million in civil damages and penalties for alleged false claims to Medicaid and other federally-funded health care programs under the terms of an agreement reached with states and the federal government.

The settlement resolves allegations the company committed False Claims Act violations by using lavish meals and speaker program honoraria as kickback vehicles to induce physicians to prescribe its drugs Azor, Benicar, Tribenzor, and Welchol, according to a press release from New Jersey’s Acting Attorney General John J. Hoffman.

New Jersey will receive a total of $690,000 as a result of its participation in the settlement, the release said.

A worldwide company with its U.S. headquarters in Parsippany, Daiichi Sankyo was the subject of a false claims lawsuit filed by one of its former sales representatives in 2010. The whistleblower’s complaint alleged that health insurance claims related to drugs manufactured by Daiichi Sankyo were false because they resulted from kickbacks the company had provided to physicians who prescribed the drugs. That lawsuit spawned the multi-state investigation that led to the settlement announced Monday

The alleged kickbacks by Daiichi Sankyo took the form of honoraria payments, meals, and other remuneration to physicians who participated in, or claimed to have participated in, Physician Opinion & Discussion programs between Jan. 1, 2005 and March 31, 2011. The alleged kickbacks also went to physicians who participated in other promotional speaker programs between Jan. 1, 2004 and Feb. 4, 2011.

“Improper incentives to health care professionals, and the alleged false insurance claims they help generate, cost us all,” Hoffman said.

The Daiichi Sankyo settlement reimburses the federal government and the participating states for damages that were assessed in accordance with the amounts that Daiichi Sankyo expended on each speaker program for each fiscal year.

The overall Medicaid portion of the settlement, including all state and federal participants, is $10 million. About half of that overall amount goes to the participating states.

The $690,000 received by the State represents the entire recovery for New Jersey’s Medicaid program. Slightly more than half of that amount will go to the federal government for its portion of the Medicaid program, and to the former Daiichi Sankyo sales representative for having brought the original legal action.

Daiichi Sankyo also has agreed to enter into a Corporate Integrity Agreement with the federal Department of Health and Human Services, Office of Inspector General. The agreement obligates Daiichi Sankyo to undertake substantial internal compliance reforms for the next five years.

In addition to New Jersey, 48 states and the District of Columbia are participating in the Daiichi Sankyo settlement.

The company, which had previously announced that it had reached a settlement, said the company was pleased to have reached the agreement.

“We are committed to being an ethical, trusted and respected company, and constantly improving how we operate is part of our culture,” said Ken Keller, president, U.S. Commercial, Daiichi Sankyo, Inc. “As part of our compliance program, we continue to review and strengthen our policies, procedures and processes to ensure compliance with applicable laws, regulations and industry standards, and to meet our own high ethical standards.”